Sir Roderick Eddington will stand for re-election at the upcoming meetings of Rio Tinto plc and Rio Tinto Ltd, the two listed holding companies on the Rio Tinto group.

Manifest’s research report ahead of the AGMs have noted a number of concerns in respect of Sir Roderick’s position on the Boards. He is a director of four other substantial quoted companies, chairman designate of ANZ Bank and Chairman of Infrastructure Australia.

Also of note is his role in a controversial A$52m loan at Allco Finance Group Ltd (in administration) in December 2007, where he serves as an independent non-executive director and a member of the audit committee. The loan was drawn from the Allco Group’s capital and provided to Allco Principals Trust – the vehicle through which David Coe and other senior executives held some of their Allco shares. The loan essentially enabled certain senior executive directors to avoid margin calls on some loans over Allco stock (Source: Sydney Morning Herald, 24 March 2009). The creditors report published by the Administrators, McGrathNicol stated:

‘Based on the information we have reviewed to date, we understand that in addition to the loan to APT being reviewed as a potential unreasonable director-related transaction, it may also be reviewed on the grounds that it:

constituted the granting of financial assistance pursuant to s260A of the Act; and

constituted a related party benefit and, as such, required shareholder approval pursuant to s208 of the Act.

We are currently undertaking a review of the terms of the loan and the circumstances surrounding its grant to APT with a view to determining whether any action may be brought’.

Further, Eddington served as Lead Independent Director and Chairman of the Audit Committee of News Corp at the time of the invoking of a poison pill by Rupert Murdoch in 2004. At the AGM on News Corp in 2005 the resolution for his re-election saw dissent of over 15% as shareholders rebelled over the perceived inaction of the non-executive directors.

These various issues may cause shareholders to question Eddington’s continued suitability for the role. Shareholders may be concerned as to whether he will have the requisite time that will be required of Board members in guiding the Company forward, especially in light of the challenges facing the Group and the mining sector in which it operates.

These concerns are especially pertinent following the resignation of CEO-designate Jim Leng,  only three weeks following his appointment to the Board due to his opinion that the proposed deal with Chinalco did not represent the best interest of shareholders.

The Company states in the Notice of Meeting:‘Due to Sir Rod’s considerable international experience in large high profile companies he is able to make a substantial contribution to the Board and its committees. Based on a positive evaluation of his performance, he is recommended for re-election.’

Last Updated: 3 April 2009